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Dodging NAD challenge is not childsplay

Per its own rules the NAD must close an investigation if it learns that the advertising at issue was permanently discontinued prior to the start of the challenge, and the advertiser assures NAD that the challenged claims will not be used in future. When an NAD challenge issues, assuming the challenged ads are still in use, an advertiser takes a hard look at these claims when preparing to defend them. And there are choices to make: whether to discontinue voluntarily claims an advertiser believes the NAD may not find adequately substantiated or hold firm and defend the claims and see what decision is handed down. With the former choice, sometimes the advertiser can avoid a lengthy NAD discussion of the claims and get a decision that details the voluntary cessation of the claims with a short conclusion that NAD appreciated the changes that NAD deems "necessary and proper".

Maybe the rules are different or at least flexible in a case of direct competitor product disparagement. Leapfrog, maker of the Leappad, challenged ads by FuHu Inc for its Nabi 2 Tablet. Video ads comparing the products used, for example, a raspberry sound effect when describing the Leappad. And an ad comparing the durability of Nabi to competing tablets ends with a child tossing a Leappad into a trashcan. Leapfrog called this literal ashcanning and asked for NAD to step in. While Fuhu did not concede its ads were falsely disparaging, it advised NAD that it would either discontinue or modify the advertising content in question "to avoid a lengthy and costly legal process." NAD went forward, noting that "[a]lthough the advertiser agreed to either discontinue or otherwise modify certain challenged advertising content and NAD appreciated this offer, given that these online videos were 'live' at the time of the filing of the instant challenge and the fact that the record does not make clear specifically which claims have been discontinued or modified (or how they were changed) NAD addressed the issues raised by the challenger and defended by the advertiser." NAD went on to recommend some specific changes to the ads, including no more raspberry sounds and trash cans.

The lesson here for companies that participate in the NAD process is that if you wish to avoid a detailed NAD decision, and the ads were not discontinued prior to the challenge, you need to detail with some specifics what you are offering to discontinue and how you are offering to modify the claims. Additionally, if your competitor sends you a cease and desist letter or otherwise reaches out to you informally to discuss concerns with the advertising, that is the best time to take stock of your claims and your strategy, particularly if you want certain claims off of the NAD table by being able to assert that you took meaningful steps to discontinue certain claims prior to the start of a self-regulatory challenge.